The crisis in the Steel industry is bigger than it appears at first sight:

Tata Steel production in the UK

To give an idea of the scale of Tata Steel in the UK:

The firm has 17,000 employees.

In Motherwell: Dalzell rolling mill and Clydebridge coating plant – the closure of both is expected to be announced shortly.

On Teeside: Middlesbrough rolling mill.

Rotherham: two sites – a technology centre and production plant.

Scunthorpe: integrated plant.

Hartlepool: pipe mill

Deeside: Shotton coating plant

Newport: Llanwern rolling mill and coating plant

Port Talbot: integrated plant (sister plant to Llanwern mill)

Caerphilly: Catnic plant

Llanelli: Trostre coating plant

Corby: tube mill

In addition there are local stockholders, suppliers and businesses concentrated mainly in Birmingham, Sheffield and Cardiff.

Crisis

The problems in Steel manufacturing have been unfolding for a while now.

On Monday 22 June, around 17,000 workers at Tata Steel plants across the country threatened to bring Britain’s steel industry to a halt with the first national strike for 35 years.

Union leaders said the pension changes could compromise safety and lead to an increase in serious accidents, or even fatalities. One Port Talbot steelworker, in his early 40s, warned: “Working 12-hour shifts at my age is hard, but at 65 it’s going to be dangerous.”

“Productivity”

Tata have been trying to solve its value added problems through “productivity” drives.
Tata Steel UK workers were in dispute over pensions. Tata wanted to end the final salary scheme for existing members and scrap provisions that allow members to retire early at 60, which the steelmaker says is a huge financial burden.

There are few Final Salary Pension Schemes left these days in Industry. Workers negotiated schemes long ago where a part of wages was invested by the company and part contribution by the company. Abandonment of such schemes has amounted to a wage cut.

The Tata scheme has 135,000 members: around 86,000 are retired and already drawing their pension; a further 33,000 are deferred members; and there are just 16,000 current employees who continue to pay contributions.

This was borne out by the staggeringly high turnout and vote for industrial action by members of Community, the largest trade union at Tata Steel. In total, 88% voted in favour of strike action; that figure rose to 96% in Port Talbot. The national turnout was 76% and in Port Talbot it was 84%. It shows the high level of organisation and consciousness within the company among industrial workers.

The workers have four big unions (GMB, Unite, Ucatt and Community),

Tata steelmakers have been hit by a toxic combination of high debts, falling demand and cut-throat Chinese competition. Last year, Tata Steel Europe racked up a loss of £402m, which followed a record loss of £1.2bn in the year to March 2013.

In August Tata Steel announced it would be mothballing its hot strip mill at Llanwern to concentrate production at Port Talbot and last month it was announced the company also intended to mothball one of its galvanized steel lines at Shotton. Llanwern Steelworks is located in Llanwern, east of the City of Newport, South Wales. Tata’s operations at Llanwern include a hot strip mill, two pickle lines, a cold strip mill and a hot dip galvanising line. The works rolls 1.5 million tonnes of steel coil per annum for automotive, construction and general engineering applications. Two hundred and fifty jobs are reported to be under threat at Llanwern, Tata said it needs to reduce costs and focus on manufacturing higher value products. Once again it is saying that labour is a “cost”, ridiculous as labour actually produces wea;th and adds value. Even when the monopolies have no control over their markets, there are better ways of cutting costs than removing productive labour and skills.

Back in 2013 – Tata Steel Europe, the former Corus, reported a record annual loss of £1.2bn then. The multinational has tried to hide this fact and that the writing was on the wall even then. It underlines the lie that Osborne pedals that its policy against growth in the economy is working. It echoes the reality that the Corbyn anti-Austerity and the manufacturing growth Alternative is a necessity. The importance of balancing the economy and manufacturing is totally the requirement of the day.

The Port Talbot steel works is owned by Tata Steel, a Mumbai-based company that employs almost 17,000 steel workers across the length and breadth of the UK. There are 4,000 steel workers in Port Talbot, and more than twice that number of jobs in my constituency depend on the steel works through its supply chains. The Port Talbot steel works has been the beating heart of the community for generations, and its output is of critical importance to the local, Welsh and British economies.

Economy and Wales first Minister, Edwina Hart, is backing demands for urgent action from the UK Government to address high energy costs that are disadvantaging the steel industry in Wales and across the UK against overseas competitors. Even if this is the case it does not recognise the essence of the crisis in steel and offer the solution.

Speaking ahead of the summit, Mrs. Hart said: “The steel industry in Wales and across the UK continues to be seriously disadvantaged by high energy costs and cheap imports. These combined pressures mean that a number of Wales-based companies are reaching a critical point and jobs are in jeopardy. More support to address these matters at a UK level will be key in allowing Welsh businesses to operate on a level playing field.”

It is clear that the Conservatives hide the intention of trade embargo against China, which will only intensify the crisis. It hides the global economic crisis and further recession. Instead of preserving Steel production to prepare the economy it prefers to increase deficit by reducing manufacturing GDP further and threaten destruction of key British natural resource.

The Steel industry is prepared to go to extreme lengths to increase “productivity”.

Not only pensions but also the health and safety of workers and their very lives have been put at risk to “cut costs”. The working conditions and hard won benefits are important to workers’ dignity.

The record of steel companies in recent times is not good.

There are to be no criminal charges after the death at a Llanelli steel works in January 2013.

Police said they did not impose any criminal charges following the accidental death of a 40 year-old man at a steel products company in Llanelli.

Pawel Pagos, a Polish national, received fatal injuries at the Llanelli steel works Dyfed Steels on the Dafen Industrial Park in July.llanelli-steel-company

Dyfed Powys Police say they have completed their investigation and no criminal offences were to be found.

Police indicated that the investigation passed to the Health and Safety Executive.

It is believed that a lorry trapped Mr Pagos, who had been an LGV fitter with the Llanelli steel company for five years.

Det. Insp. Gary Phillips said: “Our side of the investigation has now been completed.

“No criminal offences were detected so responsibility for the joint investigation has been passed to the Health and Safety Executive.”

Trostre Steelworks is a tinplate manufacturing facility located in Pemberton, Carmarthenshire, just outside Llanelli, West Wales.

Presently the plant employs around 700 people, and manufactures tinplated steel for packaging applications such a food and drinks cans, aerosols and paint tins. The plant takes in hot rolled steel from Port Talbot and Ijmuiden (a port city in the Dutch province of North Holland), and some cold rolled steel from Llanwern. The plant’s customers include HJ Heinz, Ball Packaging Europe and Crown Holdings.

Tata Steel Packaging Recycling (TSPR) is based at the site, responsible for managing the largest steel recycler in the UK.

Tata itself was fined after worker lost parts of his fingers at Trostre works
in January 2014.The company was fined £25,000 at the works in Llanelli.

Llanelli Magistrates Court heard how the man, an employee for 34 years, was working on a production line on December 6, 2012 when his left hand became trapped in a pair of steel pinch rolls.

The crush injuries that resulted led to the amputation of half his index finger and part of his middle finger.

The Health and Safety Executive (HSE) investigated and found there was insufficient guarding equipment on the machinery the worker was using.

Tata Steel UK Ltd was also found not to have properly assessed the risks to workers of using the equipment, even though it clearly represented a significant risk because operatives had access to dangerous parts.

Tata Steel UK Ltd, of Millbank, London, was also ordered to pay £8,320 in costs after pleading guilty to three separate breaches of Health and Safety legislation.

After the hearing HSE inspector Steve Lewis, said: “This was a completely needless and entirely preventable incident that left an employee with a permanent impairment.

“Tata Steel UK Ltd failed to carry out a suitable risk assessment of the equipment their workers was using. They failed to provide machinery guarding to current standards, did not prevent access to dangerous moving parts of machinery and failed to provide a safe system for managing and controlling the risks associated with a production line.

“It is shocking that a company of this standing failed to achieve compliance on such a basic level of machinery guarding, thereby putting their employees at risk.

“This case should serve as a warning that HSE will not hesitate to prosecute companies where key safety devices are not fitted to potentially dangerous machinery.”

Dyfed Steels is a steel company based in Llanelli. Back in August 2010, Polish worker Pawel Pagos, 40, suffered fatal injuries at Dyfed Steels on Dafen Industrial Park after apparently becoming trapped by a lorry.

In 2006, David Thomas, there was an investigation into claims of falsified steel safety certificates; the case was dropped by police.

Why has this particular employer taken to extreme “productivity” measures and negligence when it comes to undermining workers’ dignity? The answer lies in the crisis and profit conditions of the market.

Dyfed Steels slid into the red.

Dyfed Steels has slipped into the red as a result of rising costs.

Its profitability was hit by a £1.2m rise in administrative costs, but the Llanelli-based steel business says it is well placed to boost sales and profits in this financial year. It thought that it had plans by exploiting workers.

According to its latest set of accounts, Dyfed Steels posted pre-tax losses of £1.1m in the year ending 31 January 2013, compared with pre-tax profits of £146,000 a year earlier. Turnover fell by 3 per cent to £62m over the same period, all of which was generated in the UK.

In their report accompanying the accounts, the directors stated the company’s operating loss was caused by a range of factors, including deteriorating gross profitability, rising staff and distribution “costs”, and increasing rent and rates for additional sites.

Administrative expenses jumped to £15.8m in the last financial year, as opposed to £14.6m a year earlier.

The report added: “In the forthcoming year, the directors perceive that the market in which they operate will remain competitive as a result of the economic environment. However, the directors consider the group to be well placed to achieve growth in sales and profits.” Of course this has not happened.

Dyfed Steels claims to be the largest independent steel stockholder and processor in Wales and the South West of England. It carries more than 15,000 tonnes of stock at any given time and puts 44 vehicles on the road every day. They appeared in the Western Mail list of the top 300 businesses in Wales in 2008.

So far we have seen that Redcar is the tip of the iceberg in the worldwide crisis. The underlying crisis is affecting and jeopardising the whole of British steel production. The state will need to drastically intervene if there is to be any future for steel. The present Conservative Government, the monopolies nor the financial oligarchy are prepared to invest.

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